The Rocky Road to Decentralisation

Posted by Peter O’Brien, 28 October 2014

After twelve months in the making, the RSA City Growth Commission, chaired by the former Goldman Sachs Chief Economist, Jim O’Neill, has published its final report. The Commission was tasked with examining the current and potential future contributions of cities and city regions in the UK to macro-economic growth. The Commission has seized the moment, and provided a valuable contribution. Recent events have led to devolution being more visible to the public than at any point during the last decade.

The final report has a strong Mancunian flavour to it – and this is not simply due to the birthplace of the Commission Chair. In his foreword, O’Neill suggests that ‘some devolution is a necessary but not sufficient condition for stronger national growth’. This begs two questions. First what sort of devolutionary change is the Commission proposing? And second, what other interventions and policies are needed to build balanced and sustainable economic growth and prosperity within and across different parts of the UK? The remit of the Commission means that it has turned the majority of its attention to the first question rather than the latter.

The Commission seeks to outline how cities and city regions could boost total UK output by £79 billion per annum if they were to ‘reach their growth potential’. O’Neill has been consistent that the Commission would only recommend supply side interventions, thus the strong focus on devolved powers relating to infrastructure, skills, planning, housing, digital connectivity, science and innovation and migration. This means that particular questions and subsequent answers were never on the table from the outset. The Commission also leans heavily towards cities and city regions needing to establish appropriate governance arrangements, and using evidence, intelligence and data in a more systematic fashion. In attempting to tackle the long-standing conundrum of sub-national governance in England, the substantive evidence for Metro Mayors, in terms of what they offer in terms of accountability, and direct links to growth, public service delivery, and the catalyst for citizen and community engagement, is inconclusive. It is no coincidence that Metro Mayors tend to be the preferred model for many who favour greater managerial urbanism.

Although firmly buying into the narrative of agglomeration, the Commission does flirt with the subject of small cities, which is sensible because of the preponderance of such places in UK. But it avoids some of the tricky questions about unintended consequences and negative externalities of urban growth. However, the Commission does, at least, recognise that a mix of people and place-based interventions form the foundations of successful local development strategies.

Initially, the Commission identified fifteen cities and city regions for scrutiny during the course of its review. This was understandable given the time constraints the Commission faced. However, by being perceived to employ a ‘league table-type’ methodology, the Commission has received criticism from some quarters. In reaching its conclusion that only two city regions are ready for devolution (e.g. Greater Manchester and West Yorkshire), there are echoes of where we were seven years ago when Manchester and Leeds were chosen by the then Labour Government as statutory city regions. In their favour, both city regions can point towards years of intra-city regional working, they have scale, local capacity and have produced and implemented evidence-based strategies and investment plans.

During the launch, in London, of the Commission’s final report, Lord Heseltine linked further devolution in England, Scotland, Wales and Northern Ireland to ‘English Votes for English laws’. He also suggested that significant machinery of government changes would be required in parallel with greater devolution from the centre. Jim O’Neill reminded the audience that the Commission had considered cities and city regions across all parts of the UK, but the final report, at times, does not take sufficient account of the variegated devolved landscapes in which Glasgow, Cardiff and Belfast are located and operate within. Sir Richard Leese, Leader of Manchester City Council, said that fiscal devolution should be separated from further policy and resource devolution, and that whilst some tax powers were needed at the local level, there was a risk that Whitehall grouped further devolved powers with substantive fiscal autonomy and placed both firmly into the ‘too hard to do box’.

But has the City Growth Commission’s work, and other similar studies, captured the mood of the Scottish Independence Referendum, if indeed such an atmosphere exists in the rest of the UK? The Scottish Referendum ignited interest in renewed civic engagement and demands for a different relationship between political institutions, economic decision-makers and citizens, and a yearning for new solutions to some big economic, social and environmental challenges. City region devolution, in its current guise, feels as though it is being driven by structuralism, the tweaking of politics per se and the implementation of existing economic orthodoxies, albeit at new spatial levels. Perhaps O’Neill is right, ‘some devolution is a necessary, but not sufficient condition…’

Post-referendum blues?

Posted by Andy Pike, 3rd October 2014

A sense of irreversible change pervades the atmosphere in the aftermath of the referendum on Scottish independence. Metaphors of cats out of bags and genies out of bottles abound in public commentary. While the details and timescale of what additional powers and resources will accrue to Scotland in the wake of the ‘no’ vote are worked out, the deep ramifications of the result for the rest of the UK and especially England are only beginning to be comprehended. The thorny issue of how England – as the largest demographic and economic part of the UK – could or should be governed remains a lingering conundrum. The pre-referendum ‘vow’ on further decentralisation by the leaders of the national political parties served only vigorously to stir up longstanding discontent about the unevenness and perceived unfairness of the decentralised arrangements in the UK. Particularly acute are the feelings of disadvantage and marginalisation felt in northern cities and regions, wedged between what some have called the city-state of London and the Greater South East on the one hand and a set to be even more devolved Scotland on the other.

Voices amongst the leading city-regions in England are calling for further powers and resources, challenging central government to proceed at the same rate as Scotland. For them, discussions about the territorial discontinuities of which MPs can vote on which issues are national political questions distinct from questions of decentralisation within England. Central to their argument is that Whitehall is dysfunctional because of its centralist and top-down world views, vertical departmental silos and lack of cross-governmental co-operation. City-regional groupings of local authorities, they argue, have demonstrated their competence and ability to provide a place-based focus to the design and delivery of public policy on growth, skills, transport and public service reform when trusted and given appropriate kinds of decentralised powers and resources. Further such technocratic fixes can still the waters demanding change while any more thoroughgoing political decentralisation can follow, especially given the difficulty of resolving George Osborne’s enthusiasm for city-regional ‘Metro Mayors’ with the widespread democratic rejection of Mayoral models outside London in 2011.

While lively and substantive public debate about how we are governed is welcome, there remain some big questions to be addressed and deliberated. Will the Scottish referendum become another episode of constitutional tinkering, improvisation and muddling through in the long history and tradition of British political economy, civil service and public administration? This moment has fomented and expressed demands for sweeping, radical change. It prompts discussion of whether and when the UK should attempt to codify a written constitution, whether it should become a federal state and what new kinds of decentralisation might be explored. Innovative institutional fora bringing together the civic, private and public spheres can channel and stimulate further deliberation, enabling further debate from a newly (re)engaged citizenry and political class struggling to make sense of the shifting landscape. Can the outpouring of political interest from the Scottish vote spill-over and be sustained in England? Will a drift back to political apathy and distrust simply be accelerated if tangible change remains distant? Experience suggests entities such as constitutional conventions can be inclusive, demonstrate legitimacy and find consensus but take time to mobilise, deliberate and articulate participants’ views. Such a process might better have started back in 2012 when the referendum was agreed.

Can an asymmetrical structure of government and governance involving entities with different powers and resources decentralising at different speeds be designed and made accountable, legitimate and workable? This messy, moving patchwork is exactly the direction in which the UK has been heading since devolution and constitutional change in the late 1990s. Decentralisation settlements have varied between Scotland, Northern Ireland and Wales, London and the rest of England. Arrangements for political leadership, local democracy, decision-making and funding have diverged. While incremental review and enhancement of devolved arrangements have been undertaken for the devolved administrations in Scotland, Northern Ireland and Wales, the parallel reviews in England have been narrower and struggled meaningfully to impact government policy. Evidence from beyond the UK is that while what are called ‘multi-level governance’ arrangements may be untidy, fluid and ongoing they can provide workable systems of government and governance interpolating myriad public, private and civic actors the local, city-regional, regional, national and supra-national levels. Drawing on the experience of Australia, Brazil, Canada, Germany and the US, one model of multi-level governance in particular warrants further scrutiny (article in The Conversation). In a comparatively old state like the UK with an oversized England dominant in economic, demographic, political and cultural terms, a federal solution for the UK demands serious examination. Unearthing long buried strands of federalist thought from Gladstone and others, the critical issue for the UK is federalisation not just between its constituent sub-national units but consideration of what kinds of entities would be needed within England. Discussions on city-regional and county level structures in England are part of this.

How will especially northern England work with Scotland in the new dispensation? A degree of ‘post-devolution blues’ have been evident since devolution and constitutional change in the late 1990s. In economic development, Scotland has benefited from relative stability, long-term strategy and planning and greater resources. Its institutional structures are more coherent, legible, responsive and effective. On the other side of the border, limited institutional capacity and resources plus endemic institutional churn and disruption has left a legacy of fragmentation, incoherence and ineffectiveness. The period since 2010 and the dismantling of regional structures has presaged hiatus and, as our national survey of LEPs demonstrated (SERC Discussion Paper 150), bequeathed as yet unresolved structural dilemmas concerning centralism and/or localism, competition and/or collaboration, agility and/or “bureaucratisation” and limited (albeit incrementally growing) capacity and resources. Disquiet over the lack of a level playing field on both sides of the border has spilled over in the competition for inward investment projects as high profile projects have ended up in Scotland.

Momentum has built upon the growing and widening consensus about the basic rationales of decentralisation in more efficient matching of resources to local preferences, the mobilisation of local knowledge and bringing decision-making closer to citizens. The Scottish referendum result has stimulated a political dynamic skating over any lingering concerns about what research from CURDS and LSE found was mixed international evidence of decentralisation and its impacts on public policy and wider outcomes (Decentralisation Report).  Yet, in the highly centralised context of governance in England, centralisation rationales are deeply entrenched (Research papers RP14/43) and Whitehall is distrustful of the capability of local actors and partnerships. In the context of austerity, there remains fear of the impact of uncontrolled local authority spending on macroeconomic policy and stability, the need for accountability in centre-local relations given central government grant funding to deliver statutory services, and the service provision role of local authorities and equity implications of any ‘postcode lottery’ in access to public services. What concrete degrees and kinds of decentralisation in England this unprecedented and uncertain amalgam brings to bear are difficult to discern.